Consumers v BP
BP’s Woes in Alaska Continue
BP, the world's third-largest publicly traded oil company, announced on August 5, 2006 that it was indefinitely shutting down production of its pipeline in Alaska's Prudhoe Bay oil field. The shutdown came on the heels of an oil spill that was caused by a rupture in a segment of pipeline that was later found to be severely corroded. The Prudhoe Bay closing will reduce Alaska's North Slope oil production by 400,000 barrels per day, dealing another major blow to the country's already tight oil market, and the closure could possibly lead to employment layoffs. Recently, however, BP has announced that it received permission from the U.S. Department of Transportation to keep one-half of its Prudhoe Bay pipeline open, a move that will enable BP to maintain a production of 140,000 barrels of oil per day.
The recent shutdown of the Prudhoe Bay pipeline, however, is only the latest in a history of maintenance problems BP at Prudhoe Bay. BP has admitted responsibility for the current closure, citing a lack of upkeep, and they revealed that the side of the pipeline where the present spill occurred had not undergone an inspection since 1992. Additionally, the western side of the pipeline which is scheduled to remain open has not undergone a full inspection since 1998. BP has a history of failing to maintain their pipeline. In March 2006, corrosion was blamed for 250,000 gallons of crude oil that spilled from a pipeline. BP remains under criminal investigation for that spill; however it announced that it would replace three miles of the pipeline where the spill occurred. Also, in April 2006, BP discovered a natural gas leak that was also caused by severe corrosion in the pipeline, and in 1998, a similar leak caused a fire at a BP Prudhoe Bay production building.
